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Beach to Snow to Desert Sun

In Cardiff by the Sea, Calif., a beach community located between Encinitas and Solana Beach in San Diego County, homes are perched on a hill above the Pacific Ocean.
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By AMY GUNDERSON

It is a point of pride for many Southern Californians: toasty, golf-course-speckled expanses of desert, snow-packed mountain enclaves and temperate beaches are never farther away than a few, if traffic packed, hours on the freeway.

A pedestrian path along Cabrillo Boulevard in downtown Santa Barbara is popular with runners and cyclists.
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Despite the car crunch, life in Southern California is all about accessibility to outdoor recreation. And for second-home buyers, the possibilities are wide, whether you want a villa just off 18 holes of a Tom Fazio-designed fairway, a cozy cabin in the mountains with a lake view, or a Mediterranean-style spread a short bike ride from the beach.

In the markets that see the biggest influx of second-home buyers, sales are being driven by those seeking leisure and by aging, but still active, buyers, said Tracy Malone, with the district director for ZipRealty in Los Angeles. “The greatest influence is the recreation,” Ms. Malone said. “And it’s the baby boomers that have been driving many of these markets.”

In mid-2006, the median home price in the state topped $550,000, according to the California Association of Realtors, but real estate agents are reporting a slowdown in activity. Buyers seeking a second home, at the beach, in the desert or in the mountains, should expect to see a greater number of homes and condos on the market, sellers starting to trim prices, and developers on new properties pushing incentives.

In San Diego, a sales slowdown and a flood of new condos have pushed up inventory levels and pushed developers to dangle so-called freebies. “There are fabulous incentives,” said K. J. Koljonen, a real estate agent with Prudential California Realty in San Diego. “One developer offered shopping sprees, others gave concessions on lender fees, closing cost assistance and upgraded appliances. One project even offered buyers a Volkswagen Beetle.”

No doubt, the Beetle would be a nice way to cruise up the Pacific Coast Highway. From San Diego north to Malibu and Santa Barbara, inland to Big Bear Lake in the San Bernardino Mountains and on to the desert communities, here is a guide to the Southern California second-home market.

NEAR SAN DIEGO

Some 120 miles south of Los Angeles is San Diego, the second-largest city in the state. Beyond downtown, the larger area of San Diego County, with its nearly year-round 70-degree temperatures and 70 miles of coastline, creates the perfect destination for aspiring beach bums.

Of course, landing a beachfront pad anywhere in Southern California will require opening your wallet wide. The average price for a single-family home in San Diego is close to $900,000, while condominiums hover around $500,000. For oceanfront property and Pacific views, prices only go up from there. The Hotel del Coronado is building oceanfront villas starting at $2.4 million that restrict owners to 90 days a year of use. La Costa Resort and Spa is selling condos starting at $540,000 for a one bedroom and has similar use restrictions.

Desirable communities dot the coast north of San Diego. Towns like Carlsbad, La Jolla, Cardiff and Solana Beach all have high prices for anything on the sand. Going inland, east of Interstate 5, which runs parallel to the coast, can trim real estate prices considerably. A modest 1,300-square-foot house with a backyard in Carlsbad, away from the coast, can be found for $400,000, said Sheila Anderson, an agent with ZipRealty. West of Interstate 5 in La Jolla and Cardiff that same house may double in price. In Solana Beach, the lowest price for a house inland is $400,000, while a two-bedroom easily fetches $550,000.

And waterfront? “We have one condo on the market for $1.7 million on the water,” Ms. Anderson said.

As Jim Mason searched for a second home in Carlsbad, 35 miles north of San Diego, there was a single objective: get close to the ocean without breaking the bank. “I could have gone inland 10 or 15 miles and bought something more at the price I wanted, but I wanted a place as close to the beach as possible,” said Mr. Mason, who purchased a two-bedroom, lagoon-side condominium that is a two-mile drive to the Pacific Ocean. “I eventually hope to retire there.”

MALIBU AND THE COAST

Malibu conjures images of a celebrity-laden place where the famous can be spotted by simply going to a local coffee shop. But the reality? “That’s actually true,” said Alexis Norling, who splits her time between her three-bedroom, beachfront house in Malibu and Salt Lake City. “You go to Starbucks and it’s very common to see Pamela Anderson, Lorenzo Lamas, Robert Downey Jr. or Barbra Streisand. The celebrities are everywhere.”

But stargazing is probably a more pleasant activity than swallowing the local real estate prices. Because in Malibu, even a couple of million will not get you a dream house.

“Right now I have a $2 million buyer who wants a three-bedroom beach condo, and I can’t find it,” said Judy Van Schoyck, an agent with Prudential Malibu Realty. “There are smaller ones on the market, including one at 690 square feet. But at that size you have to go outside to change your mind.”

The Malibu shoreline stretches about 25 miles, and most of the beaches face south, but to understand the market it is important to know the local lingo. Properties in Malibu are not just ocean view; they have either “white water” or “blue water” views. The more desirable “white water” translates into seeing the waves, while “blue water” means looking out at an expanse of blue ocean. There are wet beaches and dry beaches, and which one a house is on affects the price. A wet beach disappears under high tide, and a beach is considered dry only if the sand fully dries out at low tide.

It is not surprising that homes on dry beaches carry higher prices. Ms. Norling estimates that she has one of the “least expensive beachfront homes” in town, partly because of its location on a wet beach. “At high tide, the ocean hits the house, which I love,” she said.

In rare cases a home in Malibu may even be sold separately from the land it sits on. When Ms. Norling bought her house in 2001, she did not buy the land under it and instead paid a monthly leasing fee to the owner before eventually buying the property a few years later.

A home with a piece of sand can mean prices stretching into the stratosphere. Prices of $5 million, $15 million and even $30 million, for a seven-bedroom spread, can be found. The more desirable beaches, Carbon and Broad, have a higher concentration of these super-high-end properties. Homes on Malibu Road see less traffic than those off the Pacific Coast Highway. Entry level in Malibu can mean a half-million-dollar mobile home. “It’s in a great location,” Ms. Malone said.

One alternative to Malibu is Santa Monica, 15 miles down the coast, where the median sales price is $936,000. The least expensive sale in Santa Monica this year was $450,000 for a “very small condo,” Ms. Malone said, while the most expensive home went for $4 million.

Another alternative is Calabasas, 20 miles northeast. “The town has more equestrian properties, larger home sites and gated communities,” said Christine Rodgerson, a real estate agent with Coldwell Banker Malibu East. But lower prices? Don’t count on it.

SANTA BARBARA COUNTY

Tom Fluke spends the summer at his two-bedroom house in Montecito, and the location could not be better. “It’s five minutes to the beach and a half-hour to wine country,” said Mr. Fluke, who lives most of the year in Scottsdale, Ariz. His days in Montecito, a town adjacent to Santa Barbara and tucked between a mountain range and the Pacific Ocean, are filled with gardening, walking on the beach with his dogs, watching polo matches and going wine tasting. “It’s a pretty laid-back lifestyle,” he said.

The town, with its tree-lined country lanes and two small villages that serve as the commercial hub, is seeing more baby boomers buy homes. “It used to be the newly wed or the nearly dead here, but the median age now is 45 to 55 years old,” said Pamela Regan with Village Properties Realtors, a real estate agent. “These are people who really like to be outdoors.”

Montecito is not the only exclusive enclave of Santa Barbara County. Several communities make desirable second-home locations, at slightly different prices.

The median home price in the City of Santa Barbara is $1.3 million, said Garry Gibbs, an agent with Sotheby’s International Realty. Montecito and Hope Ranch have the highest prices, with the median hitting $2.5 million, while Carpinteria and Goleta have median prices of around $900,000. But there is one common thread. “We have a tight market,” Mr. Gibbs said. “We don’t have a lot of supply.”

New development is rare in the county. In Goleta, the Bluffs at Sandpiper, a 62-home oceanfront project built by Comstock Homes, is under way after 15 years of planning. The first residences, starting around $2 million, will be complete in 2007. Other construction around town is likely to be on the site of a teardown. And in Montecito, a teardown does not mean a rundown property. Rebecca Riskin, an agent with Village Properties Realtors in Montecito, once saw buyers of a $12.6 million house take a wrecking ball to it. “They tore it down and built a new one,” Ms. Riskin said. “There are people here that will move their swimming pools.”

In Montecito, a house priced around $2 million “might need some work,” said Ms. Riskin, who has a $29 million, 22,000-square-foot house listed that has a bowling alley and a wine cellar in addition to prime ocean views.

Another option in Santa Barbara County is the Santa Ynez Valley, home to vineyards and tourists playing out their “Sideways” fantasies. Towns like Santa Ynez, Solvang and Los Olivos offer opportunities for buyers looking to stretch out. “You can get acreage,” said Marilyn Elam, a real estate agent in the Santa Ynez Valley. “Horses are usually a big part of it. But often it’s just people looking for 300 acres with no horses who just want the privacy and seclusion.”

THE DESERT

There is nothing subtle about the Southern California desert 100 or so miles from Los Angeles. Sunshine rains down on the area about 350 days a year. Some 115 golf courses create a lush oasis in the sand. And come winter, the local population jumps by 50 percent as snowbirds flock to thaw out.

Palm Springs long ago gained a reputation as a playground for celebrities; Sonny Bono was mayor in the late 80’s and early 90’s. It has also been a destination for those who embrace the outdoors, whether on the golf course, by the pool or on hikes in the nearby Joshua Tree National Park.

Even though the desert towns of Palm Springs, Palm Desert and La Quinta in the Coachella Valley remain big seasonal destinations for retirees, they are also developing more of a year-round appeal as visitors descend on the area in the fall and even the summer, when 110-degree temperatures are the norm.

Some are drawn to the golf. Others simply have an affinity for midcentury modern homes. Palm Springs is filled with “Alexanders” and “Wexlers,” simple one-level homes built mostly in the 1950’s that sit on large lots, often with swimming pools. These gained new footing in recent years with buyers looking for a throwback to the Rat Pack era. Many of the homes had not been updated in decades. Worse yet, some had been redone with Spanish tile or given a Mediterranean flair. You can still find a midcentury modern fixer-upper for around $500,000, said Rob Kincaid, a broker with Greater Palm Springs Realty. Then again, those homes were going for just over $100,000 five years ago. A midcentury modern in mint condition in the prime area of Vista Las Palmas goes for $900,000.

Prices in the rest of the Coachella Valley run the gamut. A three-bedroom, two-bathroom links-side condo at the golf community PGA West in La Quinta sells for $399,000, while a four-bedroom house in a nearby golf community, without a view of the fairway, may fetch $360,000. At the high end is the Bighorn Golf Club in Palm Desert, where you can watch Michelle Wie and Annika Sorenstam tee off at an annual L.P.G.A. tournament. The community’s 11 remaining home sites start at $2 million, with prices for homes now on the market reaching $8 million. But that’s nothing compared with the 32,000-square-foot home under construction at Bighorn. “Our clubhouse is 40,000 square feet,” said Theresa Maggio, the marketing director for Bighorn. “There are homes here that are valued at $40 million.”

John Gillette, an agent with Dyson & Dyson Real Estate, said each golf community by virtue of its course and amenities was valued differently. “Each one carries a different value for appraisals,” Mr. Gillette said. “Bighorn is sort of like the Beverly Hills of the Valley.”

IN THE MOUNTAINS

Skiers don’t have to make the five-hour trek from Los Angeles to Mammoth Mountain in the Sierra Nevadas to hit the slopes. The town of Big Bear Lake, home to the Bear Mountain and Snow Summit ski resorts, certainly does not get the snowfall that resorts farther north do, but what it lacks in fresh powder it makes up for in charm and even home prices that are decidedly more affordable.

The resorts also don’t wait for Mother Nature to cooperate. As soon as the temperature dips, snowmaking equipment is fired up. Big Bear is 100 miles east of Los Angeles, at 7,000 feet in the San Bernardino National Forest. In addition to the two ski resorts, Big Bear Lake serves as a hub of the mountain community.

The lake also serves as a barometer of sorts for real estate prices. “Lake is the premium property, and deep water is even more premium,” said Diane Chasey, an agent with Re/Max Big Bear. Deep water costs more because in times of drought, the lake level drops and the shoreline literally drifts away from houses.

“Generally the farther west, the deeper the lakefront level,” said Tyler Wood, an agent with Coldwell Banker Mountain Gallery Realtors. “From 1999 to 2005 we were in a drought, and the lake dropped about 18 feet, so the shore was 500 feet from the houses on the east side but only 30 or 40 feet out from the houses on the west. People moved their docks out and followed the water. But it definitely affected lakefront values. Property prices were depressed.”

Mr. Wood noted, though, that a few good storms off the Pacific could change the situation fast. “In one week in January of 2005, the lake came up nine feet,” he said. “Now the lake is looking great.”

The lakefront has the priciest real estate. An entry-level home there “in the worst location,” Mr. Wood said, is $600,000. Most houses on the lake are listed from $1 million to $2 million; one 9,000-square-foot log home has an asking price of nearly $3.7 million.

Lu Ana Bercier was surprised at just how high the bar was set for lakefront homes. “The places on the lake were a million plus,” Ms. Bercier said, while lots on the lake were going for $900,000.

After an extensive search, she and her husband, who live in Redondo Beach, Calif., found a three-bedroom house in a lakeside community for less than $900,000. “Our intention was to have a place right on the lake, but it was really kind of expensive,” she said. “What was affordable needed work, and we didn’t want to have to do the work. Instead we decided to get a house that wasn’t right on the lake but in move-in condition.”

The 10-year-old house is in a lakeside community where owners have a dock and the community handles chores like snow removal, which leaves Ms. Bercier more time for wakeboarding in the summer and snowboarding at the nearby resorts in the winter. “It’s a great place to learn to snowboard,” she said. “It’s very mellow. There are so many runs for beginners and intermediates, and a great staff. Someone is always available for a private lesson.”

But Big Bear is not just about fancy lakeside cabins. “We do have quite a range,” Ms. Chasey said. “You can get an adorable little cabin on a 25-by-100-foot lot in the $250,000 range.”

Agents report that the real estate slowdown is affecting the low end of the market and that they are seeing more options for buyers looking for a cabin in the under-$200,000-to-$500,000 range in Big Bear lake and adjacent communities. “Last year at this point there were less than five homes under $200,000; today there are 100 for sale,” said Mark Dolan, an agent with Realty Executives in Big Bear Lake.

The south side of the lake is more popular with homeowners because of its proximity to the ski resorts. Condominiums tend to be found closer to the ski slopes, and those that flew off the market in a matter of weeks at the height of the housing boom are now sitting on the market for 60 to 90 days.